Dated this                        day of                                     2013 

 

 

Between

  

____________________

[Company No.: ______] 

 

And

 

___________________________

[Company/Registration No.: ______]

  

And

_____________________

[Passport No.:            _________]

And

 

___________________

[Passport No.:            _________]

  

 

SHAREHOLDERS AGREEMENT

[Company:_________]

 

 

COMPANY NAME

COMPANY ADDRESS\

CONTACT

FAX

EMAIL

(REF_________)

 

THIS SHAREHOLDERS AGREEMENT is made on the                       day of                           2007

 

 

BETWEEN: –

 

______________________________________, a company incorporated in Malaysia and having its registered office at ______________________________________________ and its principal place of business at _______________________________________(hereinafter referred to as “AA”) of the one part;

 

AND

 

__________________________ (Company/Registration No.:      ), a company incorporated in ________ and having its registered office at [_____] and its principal place of business at ____________________________________________(hereinafter referred to as “BB”) of the second part;

 

AND

 

___________________(Passport No.:____________), of ___________ citizenship and having its address at [______] (hereinafter referred to as “CC”) of the third part;

 

AND

 

___________________(Passport No.:____________), of __________ citizenship and having its address at [_____] (hereinafter referred to as “DD”) of the fourth part.

 

WHEREAS: –

 

[A]       AA is principally engaged in the business of mobile communication technology provider and has an infrastructure connected to mobile operators in Asia.

 

[B]       BB is principally engaged in the business of providing Mobile and IP content in Vietnam and has licenses and agreements to operate as a Mobile and IP content provider in Vietnam.

[C]       AA, BB, CC and DD are now desirous of entering into a joint venture through equity participation in a company to be incorporated in Hanoi, Vietnam under the name of “MK VII” or such other name as may be agreed by the Parties hereto and approved by the relevant authority/regulatory body (hereinafter referred to as the “Company”).

[D]       AA, BB, CC and DD are now desirous of entering into this Agreement to regulate their relationship with each other as shareholders of the Company and certain aspects of the affairs of and dealings with the Company subject to the terms and conditions herein contained.

 

 

NOW THEREFORE IT IS HEREBY AGREED as follows: –

 

1.         DEFINITIONS AND INTERPRETATIONS

 

1.1        In this Agreement, the Schedules and the Recitals hereto, unless the context otherwise requires:

 

 “Agreement”                             means this Shareholders Agreement made between the parties hereto together with all amendments and modification duly executed pursuant to the provisions hereof;

 

“Auditors”                                  means the Chartered Accountants or Certified Public Accountants as shall be appointed by the Company as Auditors of the Company;

 

“Board”                                     means the board of directors of the Company for the time being;

 

“Business”                                 means the business of the Company as described in Clause 5.1 hereof;

 

“Business Day”                          means a day other than a Saturday or Sunday on which commercial banks in _________ are open for business;

 

“Call Option”                              means the call option granted by NTK and NDT to MKB pursuant to Clause 12 hereof;

 

“Call Option Notice”                    means the notice in the form set out in Appendix A hereof;

 

“Call Option Period”                    means the period referred to in Clause 12.1 hereof;

 

“Call Option Shares”                   means 5% of the issued and paid up share capital in the Company that are being held by each of CC and DD respectively at the time of the exercise of the Call Option by AA. For avoidance of doubt, the total Call Option Shares shall constitute 10% of the issued and paid up share capital of the Company for the time being;

 

“BB”                               means______________________________________(Company/Registration No.:                        ), a company incorporated in Vietnam and having its registered address at [___] and its principal place of business at ___________________________________________ and includes its successors-in-title and permitted assigns;

 

“BB Nominee(s)”              means the director(s) nominated by BB pursuant to Clause 11.2(c) hereof;

 

“Company”                                means the company referred to in Recital (C) hereof and includes its successor(s)-in-title;

 

“Deadlock”                                means the occurrence of any one or more of the events mentioned in Clause 11.2 hereof;

 

“Force Majeure”                         means any strike, lock out, labour dispute, Act of God, restrictions, regulations or control imposed by any Act of Parliament, any rule, ordinance, proclamation or order issued by any competent authority, enemy or hostile government action, civil commotion, industrial dispute, fire, earthquake, flood, storm, tempest, nuclear fallout or inclement weather and any circumstances beyond the reasonable control of either party;

 

“CC”                                       mean ___________ (Passport No.:_________), of __________ citizenship and having its address at [______];

 

“DD”                                       means ___________ (Passport No.:_________), of __________ citizenship and having its address at [______];

 

“AA”                                       means ____________ (Company No.: ________), a company incorporated in __________and having its registered office at _________________________ and its principal place of business at ________________________________ and includes its successor(s)-in-title and permitted assigns;

 

“AA Nominee(s)”                     means the director(s) nominated by MKB pursuant to Clause 11.2(b) hereof;

 

“Parties”                                    means AA, BB, CC and DD collectively and the expression “Party” means any one of them;

 

 “Reserved Matters”                    means any matters referred to in Clause 11 hereto;

 

 “Shareholders”                          means collectively the parties hereto;

 

“Shareholding Proportions”          means the shareholding proportions of the parties hereto in the Company specified in third Column of the table in Clause 7.3 hereof;

 

 “USD” or “US Dollar”                 means the lawful currency of the United States of America.

 

1.2          Words of the masculine gender include the feminine and neuter genders and words denoting natural persons include corporations and forms and all such words shall be construed interchangeably in that manner.

 

1.3          References herein to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their applications are modified by other provisions (whether before or after the date hereof) from time to time and shall include any provisions of which they are re-enactments (whether with or without modification).

 

1.4          References herein to “Clauses” and “Schedules” are to clauses of and schedules to this Agreement unless the context requires otherwise and the Schedules to this Agreement form an integral part of this Agreement.

 

1.5          The Clause headings are inserted for convenience only and shall not affect the construction or interpretation of this Agreement.

 

1.6          Unless the context requires otherwise, in this Agreement words importing the singular include the plural and vice versa and words importing gender or the neuter include both genders and the neuter.

 

1.7          If a period of time is specified and dates from a given day or the day of an act or event it is to be calculated exclusive of that day. If an event must occur on a stipulated day which is not a Business Day then the stipulated day will be taken to be the next Business Day.

 

 

2.         REPRESENTATIONS AND WARRANTIES

 

2.1        Each of the parties hereto hereby represents and warrants to the other that as at the date hereof: –

 

(a)          it has full power authority and capacity to enter into this Agreement and be bound by all the terms and provisions herein contained and such execution and performance does not contravene any of its contractual, statutory or other obligation of any nature whatsoever;

 

(b)          this Agreement constitutes its legal and binding obligations and enforceable against it in accordance with the terms hereunder;

 

(c)           save as disclosed in writing to the other prior to the execution of this Agreement, it is not engaged in and is not aware of any pending or threatened litigation or governmental investigation or proceedings which may have a materially adverse effect on its ability to enter into this Agreement and to fulfill its obligations hereunder;

 

(d)          the Recitals applicable to each of them are true and accurate;

 

(e)          it has the necessary experience and expertise in business to be ventured into  by the Company; and

 

(f)           it owns or has been legally licensed to use the intellectual property rights, technologies, applications or products that it will be offering under the Company.

 

2.2        The parties mutually covenant and agree that during the term of this Agreement they shall take no action and permit no omission which could cause any of their respective representations and warranties hereunder to become inaccurate. A party shall give the other party prompt notice in writing in the event any representation or warranty becomes inaccurate.

 

2.3        Each Party acknowledges that the other Party has entered into this Agreement in reliance upon, inter alia, the representations and warranties and on the undertaking contained herein.

 

2.4        All the representations, warranties and covenants shall continue to subsist after the execution of this Agreement to give effect to each and every one of them in accordance with the terms thereof.

 

2.5          Each Party hereby covenants to indemnify the other Party against and save the other Party harmless from any and all claims losses damages costs expenses and deficiencies suffered incurred or sustained by the other Party in the consequence of or in relation to any material inaccuracies errors or breach of the representations, warranties, undertakings and covenants on the part of the Party making the representation and warranties under the terms of this Agreement.

 

 

 

3.         OBJECTIVES OF THE JOINT VENTURE

 

3.1          The Parties hereto hereby acknowledge and agree that the primary objective of entering into the joint venture and this Agreement is to allow both parties to collaborate through the Company in the launching of a mobile content business in Vietnam and in so doing the parties shall assist each other and do and/or procure and cause to be done all things as may be necessary so that full effect may be given to the success in implementing and carrying out the Business contemplated in accordance with the provisions of this Agreement.

 

 

4.         INCORPORATION OF THE COMPANY

 

4.1       The Parties hereby agree that they shall as soon as practicable incorporate and cause to be incorporated a company limited by shares in Hanoi, Vietnam to be known as “MK VII” or such other name as may be agreed by the Parties and approved by the relevant authority or regulatory body.

 

 

5.         BUSINESS OF THE COMPANY

 

5.1       Principal Business

           

The Business of the Company shall principally be to provide mobile content in Vietnam.

 

5.2        Conduct of Business

 

The Business shall be conducted in the best interests of the Company on sound commercial profit making principles so as to generate the maximum achievable maintainable profits available for distribution

 

 

6.         OBLIGATIONS AND ROLES OF THE PARTIES

 

6.1        Obligations of AA

 

AA hereby acknowledges, agrees and confirms that it shall:-

 

(a)        provide a non-interest bearing shareholders’ advance of a sum not exceeding USD Fifty Thousand [USD 50,000.00] in the event the Company shall require further financial funding for the operation of the Business;

 

(b)              provide non-cash contribution in the following forms:-

 

(i)            provision of Software Applications for mobile content services;

(ii)           implementation and operation of the SMS Short Code; and

(iii)          provision of development effort to customize the SMS Short Code.

 

6.2        Obligation of BB

 

(1)        BB hereby acknowledges, agrees and confirms that it shall during the duration of this Agreement:-

 

(a)           provide the Company at a nominal fee to be mutually agreed by the Parties, its mobile gateway infrastructure for the purpose of connecting to all mobile operators in Vietnam;

 

(b)           provide a full time director level manager and two (2) fulltime mid level staff with requisite experience and qualification to the Company for a period of twelve (12) months from the commencement of Business of the Company or such other date as determined by the Company. The salaries of such assigned staff will be paid by the Company, the aggregate of their monthly salaries shall not exceed USD2,700.00. Upon expiry of the twelve (12) months’ period, the Company shall have the option to either employ such staff on a permanent basis upon such terms as determined by the Company or to terminate their employment with the Company;

 

(c)           provide business know-how, business relations, management efforts and technical efforts required for the success of the mobile content market;

 

(d)           secure for the Company contractual agreements with Vietnam’s three (3) main operators, namely Mobifone, Vinaphone and Viettel Mobile within two (2) months from the date of this Agreement, for the purpose of procuring from these operators  premium SMS shortcode to enable the Company to provide mobile content services (SMS/MMS) to mobile subscribers in Vietnam. In the event BB fails to secure the contractual agreements in accordance with Clause 6.2(1)(d) hereof, BB, CC and DD either jointly or severally shall upon receipt of a notice in writing from AA, purchase from MKB all of its shares in the Company at the price of USD Fifty Thousand [USD50,000.00]. The purchase price for the purchase of the shares by BB, CC and DD shall be paid to AA within seven [7] days from the receipt by BB, CC and DD of AA’s aforesaid notice. Subject to AA having first received the payment of all shareholders’ advances and any other monies owing by the Company to AA and the discharge of AA from all guarantees and/or indemnities issued by AA for borrowings to the Company and/or for the benefit of the Company, AA shall deliver to BB, CC and DD the duly executed share transfer forms for the relevant shares in favour of BB, CC and DD or its nominee(s) (as the case may be) together with the original share certificates.

 

6.3          Obligations of CC and DD

 

CC and DD hereby acknowledges, agrees and confirms that they shall during the duration of this Agreement contribute know-how, business relations, management effort, technical effort and infrastructure services in a go-to-market to the Company.

 

 

7.         CAPITAL STRUCTURE

 

7.1        Initial Authorised Share Capital

 

The initial authorised share capital of the Company shall be US Dollar __________________[USD____________] only divided into _________ ordinary shares of USD______ each.

7.2        Initial Issued and Paid-up Share Capital

 

The initial issued and paid-up capital of the Company shall be US Dollar ___________         [USD__________] only divided into [_______] ordinary shares of USD____, such shares to rank pari passu and shall confer on the holders thereof similar rights and obligations.      

 

7.3        Shareholding Proportion

 

a)         The initial issued and paid-up share capital of the Company shall be held by the Parties in the amounts and proportions set further in Columns (2) and (3) below opposite the Party’s name set forth in Column (1) below:-

 

 

 

Name of Shareholder	No. of Shares to be held	Percentage of Shareholdings
AA		49%
BB		10%
CC		21%
DD		20%
Total		100%

 

 

7.4        Subscription of Shares by Shareholders for the Initial Issued And Paid-up

 

a)         Within ______ (   ) days from (i) the incorporation of the Company or (ii) the determination of the value of BB’S Contribution (hereinafter defined) in accordance with Clause 7.4(d) and (e), whichever the later, each Party shall subscribe at par value for the allotment to such Party for such number of ordinary shares of USD1.00 each in the Company representing the initial issued and paid up share capital as set out below:-

 

Name                No. of Shares                 Percentage (%)             Subscription

                                                                                                Money (USD)

AA                     ______                          49                                _________

BB                    ______                          10                                _________

CC                    ______                          21                                _________

DD                   ______                          20                                _________

                        ____________               ____                             __________

Total                 ______                          100                               __________

                                    =========                ===                             ========

 

(b)           The subscription money for the Shares payable by AA amounting to US Dollar __________________[USD__________] shall be satisfied by the payment in cash.

 

(c)           The subscription money for the Shares payable by BB, CC, DD amounting to US Dollar ______________________________[USD______________] shall be satisfied wholly or partly by capitalisation of the value of the contribution by BB towards the Company as set out in Clause 6.2(1) (hereinafter referred to as the “BB’s Contribution”).

 

(d)           The value of the BB’S Contribution shall be valued and determined by the Company and approved by the Parties hereto. In the event the Parties cannot agree on the value of BB’S Contribution, the value shall be determined by an independent auditor jointly appointed by the Parties. The decision of the auditor shall be final and binding on the Parties hereto. The auditor shall act as an expert and not as arbitrator. The cost for the auditor shall be borne equally by all the Parties hereto.

 

(e)           In the event the value of the BB’S Contribution is less than the total of the subscription money payable by BB, CC and DD, then BB, CC and DD shall pay the balance of such total subscription money payable by BB, CC and DD by way of cash.

 

7.5        Further Increased in the Issued and Paid-up Share Capital

 

a)         Any further increased in the issued and paid-up share capital of the Company shall subject to the approval of the Shareholders and shall at all time be in accordance with the Shareholding Proportions.

 

b)         The subscription money payable by MKB, CENTECH, NTK and NDT for the further increased in the issued and paid-up share capital proportion to the Parties’ respective Shareholding Proportions shall be satisfied by cash.

 

c)         In the event of any Shareholder (hereinafter referred to as “the Defaulting Party”) refusing or failing to subscribe for any new shares in the Company upon any such increase with thirty (30) days of receipt of a subscription notice from the Company, the other shareholder shall be entitled to subscribe and pay for the Defaulting Party’s shares or any part thereof or to procure the acquisition of the Defaulting Party’s shares or any part thereof, by any third party. In such an event, the Shareholding Proportions shall be deemed varied to the new shareholding resulting from such subscription and payment.

 

7.6        Restriction On Issue of Shares

 

Subsequent to the allotment and issue of the shares referred to in Clause 7.4, no shares may be issued without the prior approval of the Company in general meeting. The Parties hereto agree to exercise their voting rights for the time being in the Company to ensure that any ordinary shares to be issued, will before issue, be offered to the parties hereto for subscription in proportion to their then prevailing Shareholdings Proportions.

 

7.7        Rank Pari Passu

 

Each fully paid ordinary share will carry the right of one vote at the shareholders’ meetings. Subject to the Articles of Association, all ordinary shares issued from time to time by the Company will, rank pari passu with the then existing issued ordinary shares of the Company and each share will confer on its holder the right to any dividends declared by the Company or other distribution of assets of the Company whether in liquidation or otherwise.

 

8.         BOARD OF DIRECTORS

 

8.1        Roles of the Board of Directors

 

The Board of Directors shall be responsible for and empowered to determine the overall policy and management of the Company. Save as otherwise herein provided, the Board of Directors shall have full power and authority to control, manage and supervise the Company’s business and affairs. The Board of Directors shall be entitled to delegate such of its powers to any person(s) it deems fit who shall report to and be answerable to the Board of Directors.

 

8.2        Total number of directors and structure

 

(a)        The Board shall reflect the proportionate shareholdings for the time being in the Company unless otherwise expressly agreed by the Parties and shall at all times whilst this Agreement remains in force, or unless otherwise expressly agreed in writing by the parties hereto, consist of five (5) directors. 

 

(b)        MKB shall have the power to appoint three (3) persons as director of the Company (hereinafter referred to as “MKB Nominee(s)”) and to remove and substitute any MKB Nominee(s) so appointed.

 

(c)        CENTECH shall have the power to appoint two (2) persons as directors of the Company (hereinafter referred to as “CENTECH Nominee(s)”) and to remove and substitute any CENTECH Nominee(s) so appointed.

 

(d)        All appointments, removals and substitutions under the foregoing provisions of this clause shall be by notice in writing signed by a duly authorised officer of or representatives for the Party or Parties, as the case maybe, requiring the appointment, removal and substitution. A party requiring the removal of director(s) appointed by it pursuant to sub-clause (b) and (c) above shall be responsible for and shall indemnify the other parties against any claim(s) of whatever nature arising out of such removal.

 

(e)        Notice of any appointment, removal or substitution of a director shall be given to the Company at its registered office address and the parties hereto shall procure such action as necessary under the Articles of Association of the Company to effect the appointment, removal or substitution, as the case may be subject to the compliance of the Articles of Association and the provisions of this Agreement.

 

(f)         Each party hereto undertakes to vote at general meetings in favour of the other party’s nominees for appointment as directors of the Company.

 

(g)        There shall not be any shareholding qualification for directors of the Company.

 

8.3        Alternate directors

 

            Each Director may, with the approval of the Board, by writing under his hand delivered to the registered office of the Company appoint another Director or any other person to be his alternate. Every such alternate shall be entitled to notice of meetings of the Board and, where his appointor is a member of any committee, meetings of that committee and to attend and vote a Director at any such meetings at which the Director appointing him is not personally present and generally at such meetings to have and exercise all the power, rights, duties and authorities of the Director appointing him. In respect of proceedings of the Board only, a Director who is also an alternate Director shall be entitled to a separate vote on behalf of each Director whom he represents in addition to his own vote. A Director may by writing under his hand deliver to the registered office of the Company at any time revoke the appointment of an alternate appointed by him and appoint another person in his place with the approval of the Board. If a Director shall die or cease to hold the office of Director, the appointment of his alternate shall thereupon cease and determine.

 

 

8.4        Change in shareholding

 

In the event of any change in the shareholding of the Company, the composition of the Board of Directors shall be changed to reflect and to represent the new shareholding (as nearly as circumstances permit) or in a manner and proportion to be agreed by the Parties.

 

8.5       Board Meetings

 

Board Meetings shall be held at least once in every twelve (12) months or at such other intervals as the Parties shall agree from time to time and shall in addition be convened whenever the Party hereto shall require.

 

8.6        Notice and Agenda for Meetings

           

At least seven (7) days written notice shall be given for any meeting of directors unless otherwise agreed to by all the directors. Such notice shall be accompanied by an agenda of the meeting  

 

8.7        Quorum

 

The quorum necessary for the transaction of business by the directors shall be two (2) of which at least one (1) shall be MKB Nominee. In the event no quorum is present within half an hour from the time duly appointed for the meeting, the following shall stand adjourned to the same day in the next week (7 days later) at the same time and place and the quorum for the adjourned meeting shall be two (2).  If no quorum is present at the adjourned meeting within half an hour from the time duly appointed for the adjourned meeting, the meeting shall be dissolved.

 

8.8        Voting

           

Subject to the provisions hereinbelow, questions arising at any meeting of the directors shall be by majority vote.

 

8.9        Directors’ Resolution

 

A resolution in writing signed by a majority of the Directors (or their alternates) entitled to receive notice of a meeting of Directors shall be valid and effective as if it had been passed at a meeting of the Directors duly convened and held. Any such resolution may consist of several documents in like form each signed by one (1) or more Directors and any such several documents may consist of a document duly signed by a Directors or Directors and sent to the secretary by facsimile transmission.

 

 

9.         CHAIRMAN

 

9.1        Appointment

           

The Chairman of the Board of Directors shall be appointed by the directors Provided Always that the Chairman so appointed shall at all times be a MKB Nominee.

 

9.2        Removal

           

The Board of Directors may at any time remove the Chairman and appoint in his place another from the MKB Nominee(s).

 

 

9.3        Casting vote

           

The Chairman shall have a casting vote in the event of a tie of votes at deliberations of the Board of Directors.

 

 

10.       GENERAL MEETINGS

 

10.1      Quorum

 

            The quorum necessary for a General Meeting shall be members personally present or by their representative or proxies not being less than two (2), of which MKB’s representative shall be one of such member present. If within half an hour from the time appointed for the holding of a General Meeting a quorum is not present, it shall stand adjourned to the same day in the next week (7 days later) at the same time and place, and at the first adjourned meeting, the quorum shall be two (2). If no quorum is present at the first adjourned meeting, then the first adjourned meeting shall then stand adjourned to the same day in the next week (7 days later) at the same time and place and at the second adjourned meeting any one (1) member present shall form the quorum. Any decision made at such adjourned meeting shall be deemed to be the decision of the Shareholders and be binding on them PROVIDED IF any such decision made in such adjourned is relating to matters/issues set out in the original notice of meeting and where the matter/issue to be determined is Reserved Matters, the unanimous approval of both Parties shall still be required pursuant to Clause 14.1 hereof.

 

10.2      Voting

           

Subject to the proviso hereinbelow, any resolution to be passed at a General Meeting shall be passed by a majority vote.

 

10.3      Notice

           

Unless otherwise agreed in writing by all the shareholders entitled to receive notices of meetings, at least fourteen (14) days’ notice (in the case where only ordinary resolutions are to be passed) or at least twenty-one (21) days’ notice (in the case where special resolutions are to be passed) shall  be given before a General Meeting is convened. Such notice shall be accompanied by an agenda of the meeting and in the case of special business accompanied also by a statement specifying the general nature of such business and the effect of any proposed resolution in respect of such special business.

 

 

11.       RESERVED MATTERS

 

11.1      Notwithstanding anything to the contrary herein contained, save and except for those matters that are in the ordinary course of business, the following matters shall require the unanimous approval/consent of the Parties hereto, whether by the Board of Directors or the Shareholders of the Company, whichever shall be applicable, before any of the below mentioned may be carried out by the Company:-

(a)        any alteration, deletion or amendment to the Memorandum & Articles of Association;

 

(b)        any increase in the authorized and/or paid-up capital of the Company;

 

(c)        the issuance of any rights issue in the Company;

 

(d)        the allotment, issue or placing under option of the shares, convertibles loan stocks or debentures of the Company;

 

(d)           the entry of the Company into any contract outside the ambit of its main objectives;

 

(e)           the reduction of any part of the paid-up capital of the Company;    

 

(f)            any proposal for:-

(i)         the reconstruction, consolidation or reorganization of the Company;

(ii)           the amalgamation or merger of the Company with any other company or concern;

(iii)          the incorporation of any subsidiary or acquisition of any shares in another company, partnership or venture;

 

(h)        any sale, transfer, assignment or disposal of, or creation of any pledge, charge, mortgage or any encumbrances over all or part of the business of the Company or assets of the Company of _____________________ [USD_______];

 

(i)         any borrowings up to __________________________ [USD________];

 

(j)         any lending of monies to, or suffering of indebtedness of, any company whatsoever which is not in the ordinary course of business and administration of the Company or in which any of the Shareholders has an interest whether directly of indirectly;

 

(k)        any act or thing whereby the company may be wound up (whether voluntarily or compulsorily);

 

(l)         entering of any contract or transaction wherein the contract/transaction value   US Dollar ___________________________ [USD_________];

 

 

12.        DISPUTE-RESOLUTION MECHANISM

 

12.1      The parties hereto hereby agree that in the event any dispute or disagreement shall arise in relation to any matters contained in this Agreement, the procedures to which the parties hereby agree to irrevocably submit to for the resolution of any disputed issue or disagreement shall take effect in the following order of priority:-

 

(a)        Board of Directors Meeting

 

Upon a dispute on any matter contained in this Agreement arising, any party  hereto may direct the  Company Secretary to call a meeting  of the board directors by serving on all directors of the Company a notice in writing of at least seven (7) days before such meeting is to take place and the Company Secretary shall list down the nature of the dispute to which the meeting has been requested for. The directors shall try to reach an amicable settlement or compromise to the dispute at hand. If the  directors are unable to resolve the dispute at hand within sixty (60) days of such meeting sub-clause (b) shall immediately be effected.

 

(b)        Buy-out

 

            One of the parties to this Agreement (hereinafter called the “Offeror”) may by notice in writing to the other offer to buy the shares of the other (hereinafter called the “Offeree”) at a price to be mutually agreed by the Offeror and the Offeree (hereinafter called the “Offer”).

 

            If the parties cannot agree on the price for the shares, an independent firm of auditors shall be appointed by the Company at the Company’s cost and expense to make a fair valuation of the share price of the Company and the report on the value of the shares in the Company shall be submitted to both parties within one (1) month from the date of such appointment. On receipt of the report on the value of the Shares the party that made the Offer shall pay the purchase price for the shares in full within one (1) month after obtaining requisite approval(s) from the relevant authorities and/or regulatory bodies,failing which the Offer shall be deemed to be withdrawn. Where the purchase price is paid in full as herein provided, the Offeree shall forthwith transfer all its shares in the Company to the Offeror and  the Offeree shall forthwith cause all its nominated directors or officers of the Company to resign from the Company free of any claim for compensation against the Company.

 

(c)        If no Offer is made within one (1) month of the sixty (60) days period referred to in sub-clause (a) or if an Offer having been made is subsequently withdrawn, the matter in dispute shall, unless earlier resolved between the parties, be referred to arbitration before a single arbitrator in accordance with the provisions of the Arbitration Act, 1952 or any statutory modification or re-enactment for the time being in force.

 

13.       CALL OPTION

 

13.1        In consideration of MKB paying the sum of US Dollar Zero point Five (USD0.50) only to each of NTK and NDT (the receipt of which NTK and NDT hereby acknowledges), NTK and NDT hereby respectively irrevocably grants to MKB an option to purchase (hereinafter referred to as “the Call Option”) the Call Option Shares in the event Vietnam shall change, amend and/or repel its legislation, by-laws, regulations policy to allow foreign interest to hold more than 50% equity participation in a company incorporated in Vietnam in the Tele-com sector. The Call Option shall be effective from the date of this Agreement and throughout the subsistence of this Agreement (hereinafter referred to as the “Call Option Period”).

 

13.2      MKB may exercise the Call Option in relation to 5% of the issued and paid up share capital in the Company that are being held by NTK during the Call Option Period.

 

13.3      MKB may exercise the Call Option in relation to 5% of the issued and paid up share capital in the Company that are being held by NDT during the Call Option Period.

 

13.4      The Call Option may be exercised by MKB by serving on NTK and NDT a notice in writing, substantially in the form set out in Schedule A hereto (hereinafter referred to as “the Call Option Notice”).

 

13.5      The price payable by MKB to NTK and NDT respectively for the Call Option Shares pursuant to an exercise of the Call Option shall be the price US Dollar Zero point Five [USD 0.50].

 

13.6      Upon exercise of the Call Option by MKB in respect of any of the Call Option Shares, NTK and NDT shall be bound to sell and MKB shall be bound to purchase those Call Option Shares with full title and free from all liens, claims, equities, charges, encumbrances or third party rights of whatsoever nature and with all rights now or hereafter becoming attached thereto (including the right to receive all dividends and distributions declared, made or paid on or after the completion of the Call Option exercised).

 

13.7      Completion of the sale and purchase of the Call Option Shares called by MKB shall take place on the seventh [7^th] Day following the receipt of the Call Option Notice by NTK and NDT at the office of the Company or at such other place and time as may be mutually agreed in writing between MKB and NTK and NDT. Payment for the Call Option Shares called by MKB shall be made to NTK and NDT on the completion and in exchange thereof, NTK and NDT shall deliver to MKB the duly executed and completed but undated prescribed share transfer forms for the relevant Call Option Shares in favour of MKB or its nominee(s), the requisite stamping proforma forms together with the original share certificate(s) for the relevant Call Option Shares mentioned in the Call Option Notice.

 

13.8      During the Call Option Period, NTK and NTD shall not sell, encumber or otherwise dispose of or transfer any of the Call Option Shares.

 

 

14.       FINANCIAL MATTERS

 

14.1      The Parties shall cause the Company to utilise the initial issued and paid up share capital for working capital requirement of the Company including but not limiting to expenditure, market trial, procurement of “System Equipment” and operational costs for the setting up and operation of the Company. For the purpose hereof, “System Equipment” shall mean [____][Note to MKB: Please provide]

 

14.2      The Parties shall procure that the Company shall maintain accurate and complete accounting and other financial records in accordance with generally accepted accounting principles and shall:-

 

(a)           make such records available to the Parties on reasonable notice and at reasonable times;

 

(b)           provide the Parties with all such accounting and other information as they may require for their own and for group company accounting and reporting requirements;

 

(c)           prepare and submit to the Parties an annual business plan, profit and loss, cash flow forecast, capital expenditure budget and operational budget. For the purpose hereof, the Parties shall ensure that the annual operational budget is by the Parties in the last quarter of the preceding year;

 

(d)           provide the Parties with financial reports on a monthly basis (or such other periodic interval as the Parties may agree) including but not limited to a balance sheet, profit and loss account and cash flow statement for past monthly or other relevant period and for the year up to the end of the period, a cash flow forecast for the next twelve (12) months;

 

(e)           provide the Parties with monthly management accounts on or before the 10^th of each calendar month (or such other periodic interval as the Parties may agree);

 

(f)            procure the annual accounts to be audited and file in accordance with the legal requirements with the local tax authority.

 

 

 

14.3      The Board of Directors of the Company shall at its first meeting appoint the Auditors for the Company and thereafter no other firm shall be appointed except by a resolution of meeting of the Shareholders.

 

14.4      The financial year of the Company shall end on 31 January in each year and except with the prior consent of both parties no audited accounts shall be made up for a period other than one year.

 

14.5      The Parties hereby agree that bank accounts of the Company shall be operated by signatories as approved by the Board.

 

14.6      The additional capital requirements of the Company shall be financed in the following methods and order of priority:-

 

(a)        the Parties shall each use reasonable endeavours to procure that the requirements of the Company for working capital to finance the Business are to the maximum extent possible funded by its operations’ revenue;

 

(b)        However, to the extent such revenue may not be sufficient to sustain the Company’s capital requirements, funding may with the consent of the Board of Directors, be sought from:-

 

(i)         borrowings from banks or financial institutions on the most favourable terms reasonably obtainable as to the interest, repayment and security but without allowing any prospective lender a right to participate in the equity share capital of the Company as a conditions of any loan. The Parties agree to assist the Company in negotiating with any financial institutions for any loans or other credit facilities to meet the financial requirements of the Company and to the provision of security by the Company to such financial institutions(s) which may include the creation of a charge or debenture;

 

(ii)        subject to the approval of the Shareholders, by further subscription to the share capital of the Company in the Shareholding Proportions in accordance with Clause 9.5 hereof;

 

(iii)       shareholders’ advances from the Shareholders subject to the payment of interest, such interest rate as mutually agreed by the Parties and the Company.

 

14.7      In the event a guarantee and/or indemnity is required from the Shareholders or any of the Shareholders for purposes of such borrowings in Clause 14.6(i), bids and/or performance bonds, the parties hereto hereby confirm and agree that the liability of each and every Shareholder under such guarantee/indemnity shall be borne by the Shareholders inter se in the Shareholding Proportions at the relevant time, including any legal and other costs which the relevant guarantor may be ordered to pay, irrespective of whether the Shareholders are liable as co-sureties to the creditor enforcing the relevant guarantee or indemnity and whether or not they are liable jointly and/or severally and by the same or different instruments.

 

 

15.       TRANSFER OF SHARES

 

15.1      No Sale or Charge

 

(a)        Unless otherwise mutually agreed upon in writing by the parties hereto, no party hereto shall sell, transfer, assign, charge, mortgage or howsoever dispose off or encumber any of the shares of the Company except in accordance with the provisions of this Clause.

 

(b)           The restrictions contained in sub-Clause (a) above shall not apply, where and in so far as all the shareholders for the time being consent in writing to the provisions of this Clause being waived in whole or in part in any particular case; and

 

(c)           Notwithstanding Clause 15.1 (a), CENTECH and MKB may without first making an offer to the other parties under Clause 15.2 hereof, sell, transfer, or assign up to 30% of their respective shareholding in the Company for purposes of recruitment of strategic partner or individual who may contribute to the business success of the Company PROVIDED ALWAYS THAT the unanimous approvals of all the shareholders shall have first been obtained. This right hereunder shall only be applicable by MKB and CENTECH once throughout the duration of this Agreement. Any subsequent sell, transfer or assign by MKB and CENTECH upon the exercise of the right hereunder shall be subject to Clauses 15.1(a) and 15.1(b).

 

15.2      Offer to Other Parties

 

(a)        Subject to Clause 15.1 herein, each party hereto agrees and undertakes that it (“the offeror”) will not sell, transfer or otherwise dispose of any of the shares of the Company without first making an offer in writing to sell the same to the other parties hereto (“the offeree”) on pro-rata basis to their shareholdings.

 

(b)        Every offer for sale of shares shall state the price (“the offer price”) and the number of shares for sale and shall remain open for acceptance for a period of thirty (30) days from the date of such offer. Such offer may contain the condition that such shares shall only be sold subject to the total number of such shares being sold.

 

(c)        Should such offer be declined by the offeree, the offeror may subject to sub-clause (g) herein sell the same or where applicable the portion not accepted to any person at a price which is not less than the price offered to the offeree, PROVIDED THAT if the price of the shares proposed to be sold to non members of the Company is lower than the price earlier offered to the offeree, the said shares shall again be offered to the offeree at the lower price in the manner set out above. If the new offer is declined, the said shares subject to sub-clause (g) herein may be sold to any person at the lower price.

 

(d)        If the offeree accepts the offer to purchase the shares but does not agree to the price asked for by the offeror, the parties shall request the Company’s statutory auditors to determine the fair value of the shares (“the auditors’ value”). The auditors’ value shall be final and binding on the parties hereto and the Company’s statutory auditors shall act as experts and not arbitrators.

 

(e)        If the auditor’s value is less than the offer price, the offeror shall be entitled within twenty one (21) days from the date of the auditor’s certification to withdraw the offer, failing which the offeror shall sell the shares to the offeree at the auditor’s value.

 

(f)         In the event of any shares being sold to a non-member of the Company pursuant to the foregoing paragraphs, the offeror shall cause the purchaser thereof and the other party hereto to enter into a new Agreement containing the terms and conditions of this Agreement whereupon the parties shall cause the directors of the Company to register promptly the transfer thereof made pursuant to this Clause.

 

(g)        The parties hereto agree that in any sale of shares by the offeror to a third party, the offeror shall ensure that the purchaser of those shares shall at the same time make an offer to the other party hereto to purchase its shares on the same terms at  which it has offered to purchase the shares of the offeror, failing which the transfer of the shares to the third party shall be rejected by the Board of Directors.

 

(h)        Where a party has sold all its shares in the Company, the other party hereto  and new shareholder, if any, shall take such steps as shall be reasonable to secure the release of the transferor of such shares and/or its nominee directors from guarantees they may have issued to secure credit facilities extended to the Company.

 

(i)         Where a party has transferred its share(s) to another, it shall resign and simultaneously cause the director/s of the Company nominated by it to tender their resignation as directors of the Company free from compensation against the Company.

 

 

16.       BANKRUPTCY, LIQUIDATION ETC

           

16.1      If for any reason any party shall commit an act of bankruptcy or make any composition with its creditors or shall become insolvent or have a Receiver appointed of the whole or part of its undertaking or assets, such party shall automatically thereupon be deemed to have made an offer to sell its shares to the other party at fair value and the provisions of Clause 15.2 hereof shall apply mutatis mutandis.

 

 

17.       FURTHER SHARES

 

17.1      Unless otherwise agreed by the parties hereto, the parties hereto agree and undertake with each other that where any further ordinary shares over and above the existing shares are to be issued by the Company such further shares shall in all respects rank equally with the existing Shares.

 

 

18.       SHAREHOLDERS TO CO-OPERATE

 

18.1      The parties hereto shall co-operate with one another in furtherance of the provisions of this Agreement and in furtherance of the development of the Company and shall at all times show the utmost good faith to one another.

 

18.2      The parties hereto mutually agree and hereby undertake with each other that they shall not do or cause to be done or omit to do or cause to be omitted anything whereby the image, reputation and financial standing of the Company may be adversely affected particularly in relation to creditors and or potential creditors of the Company.

 

19.       PERFORMANCE OF AGREEMENT

 

19.1      Each of the Parties hereto undertake agree and covenant with each other and the Company as follows:-

 

(a)        to exercise its voting rights in the Company to give effect to the provisions of this Agreement and to take such steps as for the time being lies within its powers to ensure that the Company shall adopt a policy consistent with the financial position of the Company;

 

(b)        to procure that the Directors nominated by it and its other representatives will support and implement all reasonable proposals put forward at the Board of Directors and other meetings of the Company for the proper development and conduct of the Business as contemplated in this Agreement an to procure all that all third parties directly or indirectly under its control shall refrain from acting in a manner which will hinder or prevent the Company from carrying on the Business in proper and reasonable manner;

 

(c)        generally to use its best endeavour to promote the Business and the interests of the Company.

 

 

20.       DIVIDEND POLICY AND DISTRIBUTION OF PROFIT AND ASSETS

 

20.1        The dividend policy for the distribution of profits of the Company shall be determined by the Board of Directors based on principles of prudent financial management and shall have regard to the provisions of Clause 20.2 herein.

 

20.2        Subject to the provisions of Clause 20.1 herein, the Parties hereto shall, after taking into consideration of the financial position of the Company, procure those profits available for distribution as dividend and cause the same to be distributed.

 

 

21.       CHANGES IN EQUITY

 

21.1      The parties hereto agree that any changes in equity shall at all times, unless provided for in this Agreement, be arrived at by mutual consent of the parties hereto.

 

 

22.       CONFIDENTIALITY/SECRECY

           

22.1      The parties undertake to each other that they will not at any time, except as required by any governmental or other regulatory authority or any competent court having jurisdiction, use or divulge or communicate to any person other than officers or employees of the Company whose province it is to know the same or on the instructions of the directors any confidential information concerning the Business, accounts, finance or contractual arrangements or other dealings, transactions or affairs of the Company which may come to their knowledge and they shall use their best endeavours to prevent the publication or disclosure of any confidential information concerning such matters.

 

22.2      This restriction shall continue to apply even after the expiration or sooner termination of this Agreement without limit in point of time for whatever reason but shall cease to apply to information or knowledge which may be properly come into public domain through no fault of the shareholders so restricted.

 

 

23.       NON-PARTNERSHIP

 

23.1      Nothing contained or implied in this Agreement shall constitute or be deemed to constitute a partnership between the parties hereto and no party shall have any authority to bind or commit the other party.

 

23.2      Except as specifically provided in this Agreement: –

           

(a)        nothing herein contained shall be deemed to constitute any party the legal representative or agent of the other party; and

 

 (b)       no party as shareholder shall have any authority to act for or assume any obligation, responsibility or liability on behalf of the

other party or Company.

 

24.       TERMINATION

 

24.1      Unless otherwise agreed or terminated in accordance with this Clause 23, this Agreement shall subsist so long as the Parties hereto are shareholders of the Company.

 

24.2      If a Shareholder: –

 

(a)        shall commit any material breach of its obligations under this Agreement and if remediable shall fail to remedy such breach within thirty (30) days from the service of any written notice by the other Party hereto complaining of such breach;

 

(b)        being a company shall go into voluntary liquidation otherwise than for the purpose of reconstruction or amalgamation or an order of Court is made for the whole or any material part of its assets;

 

(c)        shall enter into any composition or arrangement with its creditors other than in the ordinary course of its business;

 

(d)        shall have a receiver and/or manager appointed over the whole or any material part of its assets;

 

(e)        shall transfer or purport or attempt to transfer his shares other than in accordance with Clause 15

 

then and in any such event the other party shall without prejudice to such other rights and remedies as it may have terminate this Agreement forthwith in its entirety by notice in writing to the other party as the case may be. Further and in such event the defaulting party shall be deemed to have made an offer to sell its entire shareholding in the Company to the other Shareholder at its fair value.

 

24.3      Termination of this Agreement for any cause shall not release any party hereof from any liability which at the time of termination has already accrued to the other party hereto or which may thereafter accrue in respect of any act or omission prior to such termination.

 

 

25.       FORCE MAJEURE

 

25.1      If any Party is affected by force majeure which affects or may affect the performance of any of its obligations under this Agreement, it shall forthwith notify the other Party of its nature and extent.

 

25.2      No Party shall be deemed to be in breach of this Agreement, or otherwise be liable to the other Party, by reason of any delay in performance, or the non-performance, of any of its obligations hereunder, to the extent that the delay or non-performance is due to any force majeure of which it has notified the other Party, and the time for performance of that obligation shall be extended accordingly.

 

25.3      If the performance by any Party of its obligations under this Agreement is affected by force majeure for a continuous period of six (6) months, the Parties shall enter into bona fide discussions with a view to alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable.

 

 

26.       SUPREMACY AND GENERAL COVENANTS

 

26.1      If any provisions of the Memorandum or Articles of Association of the Company at any time conflict with any of the provisions of this Agreement the provisions of this  Agreement shall prevail.

 

26.2      Each of the parties hereto shall exercise all its voting rights and other powers of control available to it in relation to the Company so as to procure (so far as each is respectively able by the exercise of such rights and powers) that at all times during the term of this Agreement, the provisions concerning the structure and organization of the Company and the regulation of its affairs set out in this Agreement are duly observed and given full force and effect and all actions required of the parties hereto under this Agreement are carried out in a timely manner and in particular (but not in derogation of the generality of the foregoing) that any meeting of the board and every general meeting of the Company has the necessary quorum throughout and is conducted in accordance with the provisions of this Agreement.

 

26.3      The parties hereto shall execute and do and procure all other necessary persons or companies, if any, to execute and do all such further acts, deeds, assurance and things as may be reasonably required so that full effect may be given to the terms and conditions of this Agreement.

 

 

27.       COSTS

           

27.1      The Parties hereto hereby agree that all cost and expenses arising out of and in connection with the incorporation and setting up of the Company and this Agreement shall be paid by the Company but each party shall pay its own solicitors’ costs.

 

 

28.       NOTICE

 

28.1      Any notice given pursuant to this Agreement shall be in writing and be given by sending the same by facsimile, prepaid registered post, courier or left if addressed to the party concerned at its address given herein below or at such other address as such party may by notice in writing to the other parties have notified them for this purpose or by delivering the same to the party concerned at such address:-           

 

To MKB:-

 

_______________________

_______________________

_______________________

Facsimile No.     : ______________

Attention         : ______________

 

 

 

            To CENTECH:-

 

            [Address]

 

            Facsimile No.     :

            Attention         : Mr [ ]

 

            To NTK:-

 

            [Address]

 

            Facsimile No.     :

            Attention         : ______________

 

            To NDT:-

 

            [Address]

 

            Facsimile No.     :

            Attention         : _______________

 

28.2      Any notice so given shall be deemed to have been served if:-

 

(a)           left at the address or by courier, at the time of delivery and duly acknowledged;

 

(b)           sent by prepaid registered post, three (3) Business Days after posting thereof;

 

(c)           sent by facsimile, immediately after transmission thereof and confirmed by an answer back.

 

(d)        the date of service of such notice is not a Business Day in the locality of the addressee, the notice shall be deemed to have been received at the opening of business on the next Business Day.

 

 

 

 

29.       NON-ASSIGNABILITY

 

29.1      The rights under this Agreement shall not be assigned by any party without the prior  written consent of the other.

 

 

30.       GOVERNING LAW

 

30.1      This Agreement shall be construed in accordance with and governed by the laws of _________ and the Parties hereby submit to the non-exclusive jurisdiction of the courts in __________.

 

 

31.       TIME OF ESSENCE

 

31.1      Time wherever mentioned herein shall be deemed to be of the essence.

 

 

32.       AMENDMENT AND ADDITIONS

 

32.1      No amendment, variation, revocation, cancellation, substitution or waiver of, or addition or supplement to, any of the provisions of this Agreement shall be effective unless it is in writing and signed by all of the parties.

 

 

33.       INVALIDITY AND SEVERABILITY

 

33.1      If any provision of this Agreement is or may become illegal or void under any written law or is found by any court or administrative body of competent jurisdiction to be illegal, void, invalid, prohibited or unenforceable then:-

 

(a)        such provisions shall  be  ineffective to the extent  of such illegality, voidness, invalidity, prohibition or unenforceability;

 

(b)           the remaining provisions of this Agreement shall remain in full force and effect;

 

(c)        the parties shall use their respective best endeavours to negotiate and agree a substitute provision which is valid and enforceable and achieves to the greatest extent possible the economic, legal and commercial objectives of such illegal, void, invalid, prohibited or unenforceable term, condition, stipulation, provision, covenant or undertaking.

 

 

33.       KNOWLEDGE AND ACQUIESCENCE

 

34.1      Knowledge or acquiescence by any party of, or in, any breach of any of the provisions of this Agreement by the other party shall not operate as, or be deemed to be, a waiver of such provisions and, notwithstanding such knowledge or acquiescence, such party shall remain entitled to exercise its rights and remedies under this Agreement and at law, and to require strict performance of all the provisions of this Agreement.

 

 

35.       RIGHTS AND REMEDIES

 

35.1      The rights and remedies provided in this Agreement are cumulative, and are not exclusive of any rights or remedies of the parties provided at law, and no failure or delay in the exercise or the partial exercise of any such right or remedy or the exercise of any other right or remedy shall affect or impair any such right or remedy.

 

 

36.       BINDING ON

 

36.1      This Agreement shall be binding on the parties and their respective successors in title of the parties hereto.

 

 

[The remainder of this page is intentionally left blank]

IN WITNESS WHEREOF the Parties have set their hands respectively the day and year first above written.

 

 

 

Signed by                                                          )

for and on behalf of                                          )

                                                                          )

in the presence of :-                                         )           ………………………………………………

                                                                                    Name:

                                                                                    NRIC No.:

 

  

Signed by                                                          )

for and on behalf of                                          )

                                                                          )

in the presence of :-                                         )           ………………………………………………

                                                                                     Name:

                                                                                     Passport No.:

 

 

 Signed by ________________                               )

(Passport No.:  _________) in the presence          )

of :-                                                                          )     …………………………………………

    Name:

                                                                                     Passport No.:

 

  

Signed by________________                             )

(Passport No.:__________) in the presence       )

of :-                                                                      )           ………………………………………………

    Name:

                                                                                     Passport No.:

 

SCHEDULE A

 

CALL OPTION NOTICE

 

Date:

 

To        :           [NTK/NDT]

                        [address]

 

Attn      : Mr [  ]

 

RE:       NOTICE OF CALL OPTION

 

Take notice that ______________, pursuant to its rights under Clause 14 of the Shareholders Agreement dated [       ], hereby exercises the Call Option for [      ] ordinary share of USD____ each of which have been fully paid up or credited as fully paid up at price of [to insert the price].

 

Yours faithfully,

_______________________